World’s poorest people missing out on digital dividends

14 Jan 16

Four billion people still lack access to the internet and the anticipated gains for growth, employment and public services from digital technologies is falling short of expectations, the World Bank has said.

A woman on her laptop

 

The bank said that the benefits of rapid digital expansion have been skewed towards the world’s more affluent populations, leaving over 60% of the world excluded and unable to reap digital dividends.

To add, the effect of technology on global productivity, expansion of opportunity for the poor and middle class and the spread of accountable governance has been disappointing.

Kaushik Basu, the World Bank chief economist, said it is important “to be mindful that we do not create a new underclass”. He noted with nearly 20% of the world’s population unable to read and write, the spread of digital technologies alone is “unlikely to spell the end of the global knowledge divide”.

Since 2005, the number of internet users worldwide has more than tripled. The spread of digital technologies in this way can promote inclusion, efficiency and innovation.

The report noted that more than 40% of adults in East Africa pay their utility bills using a mobile phone, that there are more than 8 million entrepreneurs in China – one third of them women – who use an e-commerce platform to sell goods around the world and in India digital technologies have helped increase access and reduce corruption in public services.

In public health services, it added, simple SMS messages have proven effective in reminding people with HIV to take their life-saving drugs.

However, these benefits are skewed towards the wealthy, skilled and influential, who are better positioned to take advantage of new technology, and improvements to growth, jobs and services have lagged behind expectations.

It said the “digital divide” between advantaged and disadvantaged demographics needs to be closed and the internet needs to be universal, affordable, open and safe.

Regulations should also be strengthened to ensure competition among businesses, that workers’ skills are adapted to meet the demands of the new economy, and to foster accountable institutions.

It is crucial that countries create the right environment for technology, the report argued. Digital technologies can then accelerate the pace of development.

“Digital technologies are transforming the worlds of business, work and government,” said Jim Yong Kim, World Bank president. “We must continue to connect everyone and leave no one behind because the cost of lost opportunities is enormous.

“For digital dividends to be widely shared among all parts of society, countries also need to improve their business climate, invest in people’s education and health and promote good governance.” 

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